Western Australia's biggest sheep pellet supplier, Macco Feeds Australia at Williams, went up in flames on Monday and is unlikely to be back into production for at least two weeks.
Sparked by a loader fire, strong easterly winds pushed the flames into the mill area where 400 straw bales were ignited within minutes.
"All 400 bales were destroyed, right in the middle of our peak production period," said Macco Feeds director Wendy McDonald.
"And it couldn't have happened in a worse year, when there is such a shortage of feed across southern WA."
Ms McDonald said the community response to the fire was amazing, with about 50 firefighters and volunteers responding quickly.
"There were at least 20 units and it took them until Wednesday to get the fire under control," she said.
Ms McDonald said it was difficult to determine the full cost of the fire to the business.
All the electrics were destroyed which could shut down production for at least two weeks.
Macco Feeds Australia supplies sheep pellets to live export feedlots, transport operators and shipping companies.
Peel Feedlot live export facility said it was waiting for Macco Feeds to fully assess the damage to its operations and likely time out of production before it could assess the impact on its business.
Livestock Shipping Services (LSS) was contacted for comment.
Ms McDonald said sheep feed was at a premium at this time of year and with the uncertainty of the live export trade for sheep, the fire was the last thing the industry needed.
"We initially didn't think there was as much damage as there is," she said.
"We feel sorry for the shipping and transport companies, feedlots and growers who wanted pellets and now won't be able to source them for a couple of weeks.
"Their orders are gone up in smoke literally and they can't really go elsewhere.
"There is not much hay or straw around, so it is a major blow to lose 400 bales worth tens of thousands of dollars."
Macco Feeds Australia mill manager Phil Beresford told ABC Radio there were some surplus pellets to keep most feedlot operations going until they could get the mill back into production.
Macco Feeds is a family-owned company and its output is about 2000 tonnes of pellets every week.
It was named one of the safest businesses in the State last year, winning the Work Health and Safety Excellence Award in the category for businesses with 199 or fewer employees.
